Yahoo Finance What Is Beacon Lighting Group Limited's (ASX:BLX) Share Price Doing?
Beacon Lighting Group Limited (ASX:BLX), which is in the specialty retail business, and is based in Australia, saw a significant share price rise of over 20% in the past couple of months on the ASX. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Beacon Lighting Group’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for Beacon Lighting Group
What is Beacon Lighting Group worth?
Good news, investors! Beacon Lighting Group is still a bargain right now. My valuation model shows that the intrinsic value for the stock is A$0.92, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Beacon Lighting Group’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from Beacon Lighting Group?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -1.0% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Beacon Lighting Group. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although BLX is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to BLX, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on BLX for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Beacon Lighting Group. You can find everything you need to know about Beacon Lighting Group in the latest infographic research report. If you are no longer interested in Beacon Lighting Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
